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Wednesday, August 14, 2013

Dukes v. WalMart: On Remand from Supreme Court, District Court Denies Certification of Scaled-Down Gender Discrimination Class

Betty Dukes and others sued Wal-Mart in 2001, alleging that it discriminated against its female retail store employees in promotion and pay decisions, in violation of Title VII. In 2004, District Judge Martin Jenkins certified a nation-wide class of all women employed by Wal-Mart in its retail stores who were or may have been subjected to the alleged discriminatory pay and management track promotions policies and practices. Dukes v. Wal-Mart Stores, Inc., 222 F.R.D. 137 (N.D.Cal.2004) slip op. at 84 (available here).

After the Ninth Circuit largely affirmed, Dukes v. Wal-Mart Stores, Inc., 603 F.3d 571 (2010), the Supreme Court reversed, Wal-Mart Stores, Inc. v. Dukes, 564 U.S. ___ (2011) (discussed here), holding, inter alia, that the plaintiffs failed to identify a common question, the resolution of which would help resolve their discrimination claims.

On remand, the plaintiffs have sought certification of a number of smaller-scale class actions across the country. In the Northern District of California, where the court originally certified the nation-wide class, the plaintiffs asked the court to certify a class covering approximately 250 stores and 150,000 female employees in the "California regions."

On August 2, District Judge Charles R. Breyer denied certification, finding that the plaintiffs' certification effort failed in two fundamental respects:
First, though they have cut down the raw number of proposed class members significantly, Plaintiffs continue to challenge four different kinds of decisions across hundreds of decision makers, inviting failures of proof at multiple points in each region. Second, though Plaintiffs insist that they have presented an entirely different case from the one the Supreme Court rejected, in fact it is essentially a scaled-down version of the same case with new labels on old arguments.
Slip op. at 2. 

On the disparate treatment claim, the court held that the plaintiffs failed to introduce "significant proof that Wal-Mart operated under a general policy of discrimination," as required by the Supreme Court. While the plaintiffs' statistical evidence constituted "some evidence in support of their claim," they failed to identify "statistically significant disparities in even a majority of the relevant decision units in any region across the challenged pay and promotion decisions." Slip op. at 6-7. Evidence that Wal-Mart's CEO made gender-biased statements in 2004 was ambiguous and did little to meet the required showing. Slip op. at 8-9. Though the plaintiffs "succeeded in illustrating attitudes of gender bias held by managers at Wal-Mart," this evidence also failed to meet the test announced by the Supreme Court. Slip op. at 9-11. Finally, anecdotal evidence from 86 people in a putative class of 150,000 did not "meaningfully improve" the plaintiffs' showing. Slip op. at 11-12.  

On the disparate impact claim, the court held that each of the "specific employment practices" identified by the plaintiffs as "guiding local managers' discretion" and being "responsible for the promotion and pay disparities" either: (1) "did not actually apply across the proposed class for the proposed class period," or (2) boiled down to "delegating discretion, which the Supreme Court held could not provide the commonality necessary to certify a class." Slip op. at 12-16. The court held that the plaintiffs failed to demonstrate class-wide practices of: requiring candidates for promotion to relocate; failing to post job openings; or promoting from within. Slip op. at 13-14. Finally, the court held that evidence that Wal-Mart used common subjective criteria to select candidates for promotion and enumerated criteria that managers were to consider in making pay decisions simply challenged "Wal-Mart’s practice of delegating discretion to local managers, which the Supreme Court specifically held was not a specific employment practice supplying a common question sufficient to certify a class."  Slip op. at 14-16.  

The court ended by stating that the plaintiffs would have been better off identifying an employment practice and building a class around it, rather than continuing "to challenge the discretionary decisions of hundreds of decision makers, while arbitrarily confining their proposed class to corporate regions that include stores in California, among other states." Slip op. at 17.  

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